Moving Average Cross-over Signals - Trend Indicators Moving Average

Moving average indicator can be used to identify the momentum of a market move - momentum of a trend. In forex analysis there is method of using the moving average indicator just to do this. This method of trading is known as the MA cross over signal. This moving average cross over signal method involves using 2 moving averages - one moving average that has a higher price period and another moving average(MA) that has got a lower price period. For example a moving average indicator cross-over system can have the 5 day moving average and the 7 day moving average.

These two moving averages will then be used to identify the direction of the market price and also the force of the market trend.

Upward Forex Trend - when both moving averages(MAs) are heading upwards the trend is upwards - upward trend direction

Downward Forex Trend - when both moving averages are moving down the trend is downwards - downwards trend direction

The two moving averages also will be used to measure the momentum of current trend direction. As long as the two moving averages keep heading in the same direction then current market trend direction is likely to continue.

If the two moving averages crossover each other - then it means the market trend may change and a fx trader should get ready to open or to close out a trade depending on the direction of the price which the trader is trading.

A trader can learn more about how to use this moving average cross over signal and get an example of how this Moving Average crossover signal system is used to generate trade signals in the strategy tutorial: Moving Average Cross-over Signal Method

Beginner traders can also add this strategy method in their system & combine this moving average cross over method with other indicators to come up with a trading system. A trader then will write the rules of their system & use these written forex rules to know when to open a buy position or a sell trade & when to close the trade. To learn and know how to come up with a system - traders should go to strategies section of this site and read and study the trade systems tutorial guides.

Trend Indicators Moving Average Analysis - Trend Indicator MetaTrader 4 Moving Average Indicator

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